The Extractive Industries Transparency Initiative could consider sanctions for the Philippines, but is failing to hold Western oil, gas, and mining companies to the same standard.
By Anj Dacanay, Deputy National Coordinator of Bantay Kita
In recent years, it has become more and more dangerous to be an activist in the Philippines. In the extractives sector in particular, land and environmental defenders have been harassed, arrested and, in some cases, killed. Indigenous and local communities are commonly denied their legal right to free, prior, and informed consent (FPIC) for mining projects in their areas. And others from civil society organizations like myself fear for our lives because of continued intimidation and harassment from “red-tagging,” and being labeled a member of the government’s opposition. Under the current regime, there is little that we can do to preserve our rights.
However, pressure from international organizations can sometimes help curb oppression from our harsh government. The Philippines is currently under evaluation by the Extractive Industries Transparency Initiative (EITI), the global standard for transparency in oil, gas, and mining, for its compliance with the EITI Standard. This evaluation considers whether our country and the extractive companies operating within it disclose the payments that they make for oil, gas, and mineral resources. In addition to fiscal disclosure requirements, the Standard also mandates that a country allow civil society to operate freely and without constraint, engaging with the extractives sector to make citizens’ voices heard.
Civil society organizations have appealed to the EITI to use its position of power to help us Filipino activists on the ground by critically considering whether the country is meeting its civic space obligations under the Standard. If the EITI determines that the government is not complying with the organization’s rules and the country doesn’t take immediate steps to improve its actions, the Philippines can be suspended or even expelled from the organization.
EITI membership is extremely valuable to a country—it signals to investors and companies that the country is engaging in good governance and is a comparably stable and open place to operate. Suspension from the EITI would conversely signal to investors that governance in the Philippines has deteriorated and that they should take their business elsewhere. When used in this way, the EITI can be a powerful tool for those of us who have precious few options left for holding our government accountable.
Unfortunately, the EITI’s position as a global leader in good governance is under threat. In addition to rules that countries must abide by, the EITI Standard also includes expectations for companies that are part of the organization. Chief among these expectations is that they report the payments that they make to foreign governments wherever they are exploiting natural resources. These disclosures help curtail corruption and let citizens know what they are getting in exchange for their natural resources, allowing them to have a say in how those revenues are spent. Unfortunately, many EITI companies are not following the rules.
The EITI recently revealed that a significant number of its so-called implementing companies are not disclosing the payments that they make to governments. As with countries, companies gain reputational benefit and investor confidence by participating in EITI. However, it has become clear that for EITI supporting companies—unlike EITI implementing countries like the Philippines—there is no cost for not complying with the Standard.
The EITI has failed to take any action to hold companies accountable for their non-compliance. Even worse, an EITI Board Member—ExxonMobil’s representative to the board—was recently caught lobbying against the United States creating its own disclosure rule in line with the EITI Standard. Despite civil society bringing forth a complaint that called for his dismissal from the board, the EITI declined to hold him accountable for his subversive actions. It is becoming clear that the EITI has a different standard for developing countries than it does for major American oil companies.
There is often little that civil society in the Philippines or around the world can do to hold rich, powerful oil, gas, and mining companies like ExxonMobil accountable. The EITI is a global organization that brings together countries, companies, and civil society. It should be a tool that civil society can use to compel companies to operate transparently and with regard for helping citizens benefit from the extraction of their country’s natural resources. Unfortunately, the EITI cannot do this if it has been captured by rich and powerful corporations like ExxonMobil.
International civil society organizations from around the world are calling on the EITI to create sanctioning methods for companies that are not compliant with its Standard. EITI Board Chair, Helen Clark, has pledged that work on this would be “undertaken promptly” to submit to the Board for decision at its upcoming October 20-21, 2021 meeting.
We are waiting anxiously to see whether the EITI will be the powerful governance tool that we hope it can be, or whether it is merely a rubber stamp that companies can buy access to, exchanging membership contributions and modest lip service on transparency for reputational benefit. This case will set a precedent on whether and how EITI holds companies accountable—or fails to do so.
EITI has been a useful tool and valued platform for civil society, and especially in mining-affected communities. We want to ensure that companies in our country are held accountable. But how can we do this in the Philippines, if at the international level, EITI fails to hold even its own board members accountable for their actions?
When the Philippines first joined EITI, civil society feared that it may simply be used by corporations to enhance their reputations without engaging in meaningful change. As we watch this play out from the Philippines, we hope that the EITI will seize this moment to stand firm and tell companies that they must follow the rules.
For activists like me in countries like mine, the EITI maintaining its integrity and influence is critical to our ability to continue to operate freely. We hold out hope that the EITI can help us achieve better governance, but this won’t happen if it cannot govern itself.
Anj Dacanay is the deputy national coordinator of Bantay Kita (Publish What You Pay Philippines), which advocates for transparency and accountability in the Philippines’ extractive industries.